The BRETTON WOODS SYSTEM: INTERNATIONAL MONETARY FUND WORLD BANK (IBRD) IMF, WORLD BANK & GATT (WTO) at Bretton Woods – New Hampshire, United States, in July

HISTORY The International Monetary Fund (IMF) works to; -foster international monetary cooperation, -secure financial stability, -facilitate international trade, -promote high employment and sustainable economic growth, and -reduce poverty around the world. Created in 1945, the IMF is governed by and accountable to the 187 countries that make up its near-global membership.

Why the IMF was created and how it works The IMF, also known as the “Fund,” was conceived at a United Nations conference convened in Bretton Woods, New Hampshire, United States, in July The 45 governments represented at that conference sought to build a framework for economic cooperation that would avoid a repetition of the competitive devaluations that had contributed to the Great Depression of the 1930s.

Cooperation and Reconstruction Era (1944–71) As the Second World War ends, the job of rebuilding national economies begins. The IMF is charged with overseeing the international monetary system to ensure exchange rate stability and encouraging members to eliminate exchange restrictions that hinder trade.

The end of the Bretton Woods System (1972–81) After the system of fixed exchange rates collapses in 1971, countries are free to choose their exchange arrangement: one ounce of gold = 35 US Dollar ($) Oil shocks occured in 1973–74 and 1979, then the IMF steps in to help countries deal with the consequences.

Structure:IMF Members' Quotas and Voting Power The Board of Governors, the highest decision- making body of the IMF, consists of one governor and one alternate governor for each member country. The governor is appointed by the member country and is usually the minister of finance or the governor of the central bank. All powers of the IMF are vested in the Board of Governors. TThe Board of Governors normally meets once a year.

TASKS of the IMF: The IMF’s responsibilities: 1 – The IMF's primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with one other. 2 – This system is essential for promoting sustainable economic growth, increasing living standards, and reducing poverty. 3 – Following the recent global crisis in 2008, the Fund is clarifying and updating its mandate to cover the full range of macroeconomic and financial sector issues that bear on global security.

Original aims “Article I” of the Articles of Agreement sets out the IMF’s main goals: ▫promoting international monetary cooperation; ▫facilitating the expansion and balanced growth of international trade; ▫promoting exchange stability; ▫assisting in the establishment of a multilateral system of payments; and ▫making resources available (with adequate safeguards) to members experiencing balance of payments difficulties.

Important part of IMF: Financial assistance IMF financing provides member countries the breathing room they need to correct balance of payments problems. A policy program supported by IMF financing is designed by the national authorities in close cooperation with the IMF, and continued financial support is conditioned on effective implementation of this program. In an early response to the recent global economic crisis, the IMF strengthened its lending capacity and approved a major overhaul of the mechanisms for providing financial support in April 2009, with further reforms adopted in August 2010.

Where the IMF gets the MONEY? Most resources for IMF loans are provided by member countries, primarily through their payment of quotas. Since early 2009, the IMF has signed a number of new bilateral loan and note purchase agreements to bolster its capacity to support member countries during the global economic crisis. Multilateral borrowing arrangements provide a further backstop to Fund resources. Concessional lending and debt relief for low-income countries are financed through separate contribution-based trust funds. We call it as: The quota system Source:

The WORLD BANK IBRD raises most of its funds on the world's financial markets and has become one of the most established borrowers since issuing its first bond in The income that IBRD has generated over the years has allowed it to fund development activities and to ensure its financial strength, which enables it to borrow at low cost and offer clients good borrowing terms.

History... Founded in 1944 to help Europe recover from World War II, the International Bank for Reconstruction and Development (IBRD) is one of five institutions that make up the World Bank Group. IBRD is the part of the World Bank (IBRD/IDA) that works with  middle-income and creditworthy poorer countries to promote sustainable, equitable and job-creating growth, reduce poverty and address issues of regional and global importance.

THE WORLD BANK: THE BANK FOR RECONSTRUCTION & DEVELOPMENT (IBRD) The World Bank is a vital source of financial and technical assistance to developing countries around the world. Bank’s mission is: 1.to fight poverty with passion and professionalism for lasting results and 2.to help people help themselves and their environment by providing resources, sharing knowledge, building capacity and 3.forging partnerships in the public and private sectors.

IBRD & IDA  World Bank Group It’s not a bank in the common sense; it is made up of two unique development institutions owned by 187 member countries: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).

World Bank provides low-interest loans, interest- free credits and grants to developing countries for a wide array of purposes that include investments in education, health, public administration, infrastructure, financial and private sector development, agriculture and environmental and natural resource management. The World Bank, established in 1944, is headquartered in Washington, D.C. We have more than 10,000 employees in more than 100 offices worldwide.

Specifically, the IBRD: supports long-term human and social development needs that private creditors do not finance; preserves borrowers' financial strength by providing support in crisis periods, which is when poor people are most adversely affected; uses the leverage of financing to promote key policy and institutional reforms (such as safety net or anticorruption reforms); creates a favorable investment climate in order to catalyze the provision of private capital; provides financial support (in the form of grants made available from the IBRD's net income) in areas that are critical to the well-being of poor people in all countries.

IMF Members' Quotas and Voting Power, and IMF Board of Governors Last Updated: November 27, members.aspx